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In the current framework of behavioral corporate finance, this article studies the relationship between the managers’ overconfidence and firm performance through the financing structure in the Tunisian context. Our model seeks to identify if the financing structure as a mediating variable between the performance and overconfidence. The empirical study is based on a sample of 56 firm managers for the year 2014. The results of the conducted regressions confirm the existence of a mediating effect of the financing structure on the relationship between overconfidence and the performance of Tunisian firms.
This study is one of the few studies which have investigated the indirect impact of overconfidence on the performance of Tunisian firms through their financing structure; it is based on a new methodology that uses the theory of Baron and Kenny (1986) by utilising mediating variables to assess the relationship between the firm’s overconfidence and performance.
Does Managerial Emotional Biases Affect Debt Maturity Preference? Bayesian Network Method: Evidence from Tunisia
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AZOUZI Mohamed Ali , JARBOUI Anis (2016). Does Managerial Emotional Biases Affect Debt Maturity Preference? Bayesian Network Method: Evidence from Tunisia. Financial Risk and Management Reviews, 2(1): 1-25. DOI: 10.18488/journal.89/2016.2.1/22.214.171.124
This study documents that managerial characteristics’ play an important role in determining corporate debt maturity. Specifically, we focus on the relationship between the managerial biases and firm debt maturity preference. Empirical analysis of the relationship between emotional bias and debt maturity using Bayesian Network Method. We distributed a questionnaire among 100 Tunisian managers to measure their emotional biases. Our results have revealed that the behavioral analysis of debt maturity preference implies leader affected by behavioral biases (optimism, loss aversion, and overconfidence) presence prefer long term debt maturity allowing this protect against the takeover operation Russianness.
The paper pushing organizations managers to choose according to their emotional level (applied emotional capacity test up psychometric testing). In addition, it increases the validity of inferences from the research. This paper incites governments to establish training programs aimed at the development of learning of emotional capacity.